Before I started this blog I was writing a lot on the Magic the Gathering Online forums. Wizards of the Coast had contracted another company, Leaping Lizards, to create the MTGO software. The first version ran, but had issues. WotC then took over with in-house programmers, and things went rapidly downhill from there. Whether it was the Lizard's base program or the Wizards' update I can't say, but in any case Magic the Gathering Online never worked very well afterwards and never became such a big success as Blizzard's Hearthstone a decade later. (Apparently one has to have "izard" in the name to program an online trading card game).

Wizards of the Coast had acquired Dungeons & Dragons from TSR in 1997. TSR was well-known for having terrible online policies, going after people on Usenet that posted house rules and fan fiction in the early days of the internet. While WotC was a lot better with their Open Game License in 2000 allowing more participation of others in creating Dungeons & Dragons and exchanging stuff online, the D&D tools that WotC put online were always problematic. Frequently WotC promised great functionality and then barely delivered.

History is repeating itself with 5th edition of Dungeons & Dragons. Great online tools were promised, and then WotC kicked out he company developing those tools. Apparently the software developers and WotC had very different ideas on how to handle copyright and intellectual property.

I think games like Dungeons & Dragons have fundamental problems in their business model which makes taking them online difficult. There are unresolved issues between how WotC *thinks* their business works and how it really works. The business model on paper is that WotC sells rulebooks, adventures, and various source materials that players buy to play Dungeons & Dragons. The reality is more akin to that of a Free2Play game: Many people play Dungeons & Dragons for absolutely free. You don't even need a Player's Handbook to play D&D, you can borrow one from the player next to you, or use a photocopy. On the other side of the equation are "whales" like me, who bought every single 4th edition Dungeons & Dragons book (in my case even in two languages). Take that online and the clash between model and reality becomes evident: Online you *can* force every player to pay for a "Player's Handbook" or equivalent. Should you? I think that an online version of D&D in which every player is forced to pay non-trivial sums of money wouldn't work.

In addition to that WotC has a nice business of publishing official adventures, optional rules, and other game materials. And not all of that material is of really high quality. There are some gems, but there is a lot of rather average stuff. If you create a great online platform on which players can exchange their self-made adventures and game materials for free, a lot of that material will turn out to be better than the official fare.

In my opinion WotC is making an error to resist this online sharing culture. I believe a good online platform could draw a lot more players into the hobby. And even if they could play online for free and get free materials from other players, a good number of people would want to buy stuff from WotC just because they love the game. I can think of many intelligent ways where a D&D online platform could attract a lot of free players and then convert a good number of them into paying customers for various options. If they don't put good tools to play tabletop Dungeons & Dragons online, sooner or later somebody else will create a better competitor product. Do they really want another Hearthstone?

To further support your point, Pathfinder, which currently outsells D&D, has provided all of their rules online for free. (they have to do so because they are publishing under the 3e OGL). As a result there are numerous 3rd party online tools for Pathfinder.

You misrepresent that. What I said about LoL holds true for this case as well: The actual item in the online store that people buy needs to have some use. I don't suggest WotC puts up free tools with a "donate" button. I suggest WotC puts up free tools with useful things to buy as extras, for example extra races. Goodwill is certainly a factor, but people generally need some excuse for themselves to justify a purchase of a virtual item.

Definitely agree. Right now among my gaming cohorts D&D 5E scanned PDFs is all the rage, and a couple of my gaming buddies have put a fair amount of effort into indexing the things for ease of use. For most of my players they have still purchased a rulebook...but the bulk of their "actual use" these days is with the PDF. WotC has once again missed the boat by not embracing this movement sufficiently....and the "Basic D&D" rules available online have really only served two purposes: to let the OSR crowd that secretly really does want a current version of the game to have it at no cost, and to provide a free sample of what the real deal looks like to people actually do like to try before you buy without pirating.

Meanwhile I think Pathfinder will stick around simply because it is OGL, and therefore will always get more attention for it as a result.